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Blockbuster going after NetFlix
Video rental retailer will let customers get DVDs by mail with no late charges, using NetFlix model.
August 11, 2004: 10:04 AM EDT

NEW YORK (CNN/Money) - Video rental chain Blockbuster Inc. is set to begin offering customers DVD's delivered to their home by mail, using the business model pioneered by NetFlix Inc.

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The Blockbuster Online offering will let subscribers get unlimited DVD movie rentals by mail, with up to three out at a time and no return dates or late charges. It will charge a monthly fee of $19.99, slightly less than the $22 monthly price NetFlix is offering new customers. The Blockbuster offer also includes two free in-store movie rental coupons per month.

Blockbuster has offered a similar unlimited rental, no late-charge program it called Movie Pass but it required customers to pickup and return the DVDs to the stores rather than get them by mail.

NetFlix (NFLX: Research, Estimates) has seen its success in the home-delivery DVD rental market spur other established retailers to offer the same type of product.

Wal-Mart Stores (WMT: Research, Estimates) also has a lower-cost unlimited offering, letting customers pay only $15.54 a month for up to two DVDs at a time or $18.76 a month for the three DVDs that NetFlix and Blockbuster offer.

CORRECTION
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An earlier version was misleading in characterizing the type of films rented by NetFlix.

Neither Blockbuster nor Wal-Mart will rent films with NC-17 ratings, which NetFlix does offer.

Blockbuster (BBI: Research, Estimates) is the world's largest video and DVD rental retailer, with nearly 9,000 stores. Media conglomerate Viacom (VIA: Research, Estimates) is in the process of selling off its 81 percent stake in the retailer.  Top of page




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